The Relationship Between The Euro And The Euro

With an estimated population of 80.1 million, Germany has the largest economy in Europe and one of the largest economies in the world. Located in northern central Europe, Germany shares borders with nine European countries. Berlin is the country’s capital and largest city geographically. Today Germany is divided into sixteen federated states, including Berlin. German is the official language of this country, and is one of the top ten most spoken languages in the world.

* Exchange rates may affect profitability on the business if they are sourcing materials (all the ingredients used to

Foreign exchange rates are best described as simply the price of a country’s money expressed in another country’s money. In simple words, it is the rate at which a currency can be swapped for another. An example of determining foreign exchange rates is by substituting goods for currencies. Another example is the yuan-dollar exchange will depend on how well the demand and supply moves. When the demand for dollars in China climbs and supply does not go up correspondingly, each dollar will cost more yuan to buy. (Colander, 2010)

Exchange Rate: "The rate at which one unit of domestic currency is exchanged for a given amount of foreign currency"

Germany became a country in January 18, 1871. Germany is in Western and Central Europe, with Denmark bordering to the north, Poland and the Czech Republic to the east, Austria and Switzerland to the south, France and Luxembourg to the southwest, and Belgium and the Netherlands to the northwest.Berlin, its capital, is home to thriving art and nightlife scenes, iconic Brandenburg Gate and many sites relating to WWII. Munich is known for its Oktoberfest and cavernous beer halls, including 16th-century Hofbräuhaus. Frankfurt, with its skyscrapers, houses the European Central Bank.

The German economy has been growing at an average rate of 0.6 percent per year for the last 4 years; making it one of the slowest growing economies in the Euro Zone. However, study’s suggests in 2004, the domestic economy is expected to grow above 2 percent. Moreover, one-third of Germany’s

In these years the ECB lowered the interest rate. By focusing on these years only we try to isolate the effect of the low interest rate on Deutsche Bank, in order to prevent creating a rippling effect from the preceding financial crisis.

Germany is known to be one of the largest and most powerful economies in the world. It is located in Central and Western Europe, and stretches along the Baltic and North Seas. The country covers a total of 357,022 sq km, 348,672 sq km with land and 8,350 sq km with water. Germany shares borders with nine other countries, France, Switzerland, Belgium, Denmark, Poland, Czech Republic, Austria, Belgium, and The Netherlands. Germany is the seventh largest country in Europe, and the 62nd largest in the world (CIA World Factbook, 2016). The capital of Germany is Berlin, but it also surrounded by many other major cities (Leipzig, Munich, Stuttgart, Aachen, Nuremberg, Bonn, Heidelberg, and Cologne) to name a few.

Germany is a country located in Central Europe. It shares borders with Denmark, Poland, the Czech Republic, Austria, Switzerland, France, Luxemburg, Belgium, and the Netherlands. Unlike many other Central European countries, it is not landlocked, having its northern border run along both the Baltic and North Seas. The central area of Germany is mostly hills and forests while the extreme south is dominated by the Alps. The major water sources include the Rhine and Elbe river as well as Lake Constance. Germany enjoys a seasonal climate, not dissimilar to what we experience here in the Midwest.

What is an exchange rate? Exchange rate is a price for that one country’s currency can be traded for another country’s currency, which involves always two currencies. The price of a currency is determined by the country’s currency’s demand relative to its supply in the market. Furthermore, there are many factors that impact exchange rates but the most influential factors are inflation rates, interest rates, income levels, government controls, and expectations. Due to rapid economic developments and changes and many factors that impact exchange rates, it is hard to determine exchange rates.

Keegan and Green (2009) “wrote that currency exchange rates are extremely unpredictable that several enterprises pursue international sourcing strategies as a way of reducing exchange-related risk” (p.285). Currency rates can have an impact on revenues for a U.S. company expanding operations in foreign countries, depending on exchange rates. For example, the U.S. dollar is only worth seventy-four cents in Italy.

The financial crisis of 2008 crippled the European banking sector since it represented the biggest financial crisis Europe has faced since the pre 1914 gold standard period. There have been huge declines in GDP and very high levels of unemployment. Before the crunch, the system was extremely fragmented and banking regulations were very weak. There was very little supervision of financial institutions. The structure and size of the European banking sector is one of the most important prognostic factors for future economic policies, frameworks, and efficiency of financial services. Over the course of the year, there has been an inclination of disintegration and shrinkage of the European banking sector.

The European Banking Federation (EBF) identifies Euribor as ‘the rate at which euro interbank term deposits are being offered within the EMU zone by one prime bank to another at 11.00 am Brussels time’ , which is base for around 450 trillion dollar worth of financial products worldwide . Different from Libor rate coming in ten currencies, Euribor only presents in Euro . Moreover, Euribor is calculated by disregarding the highest and lowest 15% of all collected values . It is recorded that almost sixty organisations took part in the submission of Euribor, which are bigger and more diversified than Libor . As a result, as few as ten

Germany is a close contact of American businesses. With millions of people driving BMWs and Volkswagens in the United States, Americans are strongly connected to business relations with Germany. Germany is in western/central Europe, the geographic region running along the Baltic coast where it is sandy, with dunes and small hills. Germans do not use the standard American dollar; their main currency is called a Euro. On the other side of the coast are forest ridges and many lakes of the Mecklenburg lake plateau. Berlin, the capital of Germany, has less hills which is correlated more civilians live there. Germany's climate is moderate and has no extended periods of cold or hot weather. Northwest, and the coast along Germany, have a

Understanding and forecasting the foreign exchange rate are specially important for multi- national companies because they make important decisions based on forecasting information. I mention some of these decisions.